Looking beyond IPOs to build a broader investment ecosystem in Hong Kong
HKEX is expanding its product suite with new fixed-income, derivatives and connectivity offerings, giving global investors more ways to gain exposure to China’s markets
As fundraising by mainland Chinese companies strengthens capital flows, Hong Kong is again demonstrating its value as a bridge between China and the rest of the world.
Over the past year, the exchange has introduced a series of products and market enhancements to deepen connectivity with mainland China, expand investment opportunities and equip investors with more sophisticated tools to manage their risk.
Bond Connect opened the mainland’s bond market to international investors in 2017. Swap Connect followed in 2023, providing access to the onshore interest-rate swap market. That same year, HKEX launched Northbound Swap Connect by expanding access to longer-tenor swap contracts and introducing additional reference rate options. These initiatives sit alongside Stock Connect and MSCI China A50 Connect Index Futures, all vehicles that make China’s markets more accessible to international investors.
“Over the past decade,” says Louis Lau, head of Hong Kong Capital Markets Group, KPMG China, “[these initiatives have] expanded substantially in both scope and scale, now encompassing a wide range of asset classes – including stocks, bonds, wealth management products, ETFs, and swaps. Notably, Southbound Stock Connect alone now covers more than 560 eligible Hong Kong-listed stocks, accounting for over 80 per cent of the city’s total market capitalisation.”